Press Release: Nacon Launches Its Initial Public Offering on Euronext Paris Regulated Market
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Source: Bigben Interactive February 20, 2020 05:08 ET PRESS RELEASE: NACON LAUNCHES ITS INITIAL PUBLIC OFFERING ON EURONEXT PARIS REGULATED MARKET Do not circulate directly or indirectly in the United States, Canada, Australia or Japan NACON LAUNCHES ITS INITIAL PUBLIC OFFERING ON EURONEXT PARIS REGULATED MARKET Lesquin, 20 February 2020 Share capital increase of circa €88.4m: this amount can be increased to €107m in case of an integral exercise of the extension clause and of the over-allotment option (on the basis of the median price of the indicative price range i.e. €5.35 per share). Indicative price range for the Public Offering : between €4.90 and €5.80. Structure of the Offering: Public Offering (« OPO » or « offre à prix ouvert ») mainly to individual shareholders in France and Global Placement mainly to institutional investors (« PG ») with a private placement in France and an international private placement in certain countries (except notably the United States of America, Canada, Australia and Japan). Purchase orders through the Public Offering for retail investors: two types of orders may be issued: P (priority) Orders reserved for individual shareholders of Bigben Interactive shares and A (non priority) Orders. Subscription commitments: for €21.9m, including €10m from the investment fund Bpifrance Capital I (represented by its management company Bpifrance Investissement) (it being specified that the appointment as director of Bpifrance Investissement or a representative designated by the investment fund Bpifrance Capital I will be proposed), representing circa 24.77% of the total amount of the Offering (excluding the extension clause and the over-allotment option) on the basis of the mid-point of the indicative price range Subscription period: from 20 February 2020 to 4 March 2020 for the (OPO) Public Offering and until 5 March for the Global Placement. Fixing of the Public Offering price: 5 March 2020 ·Securities eligible to French PEA and/or PEA-PME subject to conditions Nacon, an integrated player in the fast-growing video game market, announces the launch of its Initial Public Offering with a view to the admission of its shares to trading on the regulated market of Euronext Paris - (ISIN code: FR0013482791/mnemonic: NACON) On 19 February 2020, the French Financial Markets Authority (AMF) approved, under visa number 20-047, the Prospectus consisting of the Registration Document, approved on 29 January 2020 under visa number 20-003, and of a Securities Note (including the Prospectus summary). THE WINNING STRATEGY OF THE INTEGRATED VIDEO GAME DEVELOPER-PUBLISHER BUSINESS MODEL Founded in October 2019, following the decision of BIGBEN INTERACTIVE SA (a company listed on Euronext Paris, B compartment, under the FR0000074072 security code) to consolidate its Gaming Division into a new entity, NACON SA is a pure player in video gaming, encompassing activities carried out as a publisher-developer of video games and a designer-distributor of premium gaming accessories. NACON's strategy lies in its desire to become an integrated player in video game publishing, positioned in the "AA"1 video game segment on a controlled budget, with a logic of specialization and search for niches that are at present scarcely or not exploited by industry majors. The acquisition policy carried out since 2017 is based on the integration of studios with a recognized expertise in the genres targeted by the Group (Racing, Sports, Simulation, Adventure and Action) and with technical expertise, such as the KT Engine developed by the KT Racing studio. This presence across the entire value chain gives NACON better control over the development of new games in order to increase the quality of the games produced and reduce the risk of execution due to delays or cancellations of releases. ONE OF THE WORLD’S LARGEST PORTFOLIOS OF AA1 VIDEO GAMES With the integration of the studios acquired over the past two years, NACON has to date one of the world's largest portfolios of AA1 video games, with more than 100 games developed for consoles and PCs including 10 games with its own IP assets (Pro Cycling Manager, Rugby 20, Styx, Tennis World Tour, V-Rally...) and more than 200 licensing agreements signed per year (WRC®, Tour de France®, Warhammer®...) in order to integrate their brands, models, characters or universes into the games. NACON, THE PREMIUM REFERENCE OF GAMING ACCESSOIRES NACON relies on historical know-how and expertise that has been recognized for more than 20 years in the development of premium accessories. With numerous patents (35 patents and more than 5 years of research and development on just its Pro Controller devices), NACON also has a powerful international distribution network that ensures a commercial presence in more than 100 countries. After quickly integrating eSports into its marketing strategy to establish the reputation of its premium accessories, NACON has signed a prestigious partnership with SONY (Sony Interactive Entertainment) to develop and market the first Revolution Pro Controller under PlayStation® 4 license. Since that first success, Nacon® has firmly established itself as one of the leading brands in the field of console accessories. 1 NACON definition: All games with sales between 200,000 and 3 million copies and budgets between 1 and 20 M€ A STRONG AND PROFITABLE GROWTH TARGET BY 2023 With a qualified and passionate team of 430 people, including nearly 300 developers employed in its 8 expert video game studios, NACON has a large international presence with employees in 8 countries and most of its sales made with international customers (77% in 2018/19). NACON has a strong and steady growth history, with an average annual rate exceeding 20% over the last 3 years and 113.1 M€ sales at 31 March 2019. In the first nine months of FY 2019/20, unaudited sales amounted to 104.2 M€, up by 25.1%. The strong growth of NACON is accompanied by a marked improvement in profitability with a current operating margin2 of 11.1% in FY 2018/19, compared to only 1.3% in FY 2016/17. This trend is confirmed in the current financial year, with a current operating margin2 of 16.8% in 2019/20 First Half 3.. Based on figures previously disclosed on 31 December 2019 and of its estimate for the last quarter, NACON expects achieving the following “consolidated4” results for the financial year closing on March 31, 2020: - a turnover between 127 and 133 M€, - and a current operating income rate2 of ca.16%. The increase in margin in recent years can be explained by the critical size reached by NACON, as well as by the increase in digital sales that generate a higher profitability than physical sales. In the medium term, banking on the good trend of its business and the expected improvement of its current operating margin2, NACON expects for the year ended March 31, 2023: - a turnover between 180 and 200 M€, - and a current operating income rate2 exceeding 20%. THE IPO, ACCELERATOR OF NACON'S STRATEGY NACON intends to build on the success of its integrated developer-publisher model, the depth of its video game offer and the premium positioning of its accessories to capture all the opportunities of this market, which is currently undergoing its digital transformation. The net proceeds of the fundraising effected through this offering are intended to give NACON the appropriate means to increase its development, particularly in terms of financing to support its future growth, to increase the research and development budget of new games and continue its selective policy of studio acquisitions. 2 Current Operating Margin ROC Rate Current Operating Income Related to Sales = = 3 Data that has been subject to limited review 4 The NACON figures given as at 31 March 2020 were compiled by adding 6 months of combined figures for the period 1 April 2019 - 30 September 2019 (from the combined accounts in section 18.1 and 18.2 of the URD) to the 6 months of estimated consolidated figures covering the period October 1, 2019 - March 31, 2020 The estimated net proceeds of the Offering amount to €84.1m in the middle of the range of which: About 65% of the funds will be dedicated to the organic development of the Company, mainly through recruitments allowing it to internalize an additional part of the developments of the games and increase the pace and profitability of the commercial launches of NACON games; About 35% of the funds will be used on possible external growth transactions. The Company will not use the funds raised for the early repayment of its borrowings that were medium-term at inception, but to finance additional development costs (organic growth or acquisitions). At the present time, the Company is not party to any agreement involving the purchase of shares in an identified target as part of a planned acquisition. If the Offering is limited to 75% of the envisaged amount and based on the lower limit of the indicative Offering Price range, the net proceeds from the Offering will be €60,743,805. In this situation, without jeopardizing its 2020- 2023 objectives, the Company will be required to adapt its strategy by reducing the amounts allocated to its organic growth and possible acquisitions proportionately. At the end of the transaction, BIGBEN INTERACTIVE SA intends to keep a broad control of its subsidiary NACON. INDICATIVE TIMETABLE OF THE OPERATION 19 February Approval of the Prospectus by the AMF 2020 20 February Publication of the press release announcing the Offering and the release of the 2020 Prospectus Release by Euronext of the opening